Sounds reasonable. We might be talking about a modder or someone in other ways deeply invested in the community who is given pocket change each month as some kind of hobby stipend. Which is perfectly all right precisely up to the moment where anyone involved starts to think of it as a full time gig, maybe a career even.

The failure on the side of squad then isn't so much in not paying them more (although that would certainly be one way to solve it), it's in not realizing that there can't be a middle ground.

What I don't get at all, no matter how you spin the story, is how anybody could be forced to overtime etc on pocket change. Sure, that stuff happens millions of times each day, but it would typically involve people at the brink of starvation in an isolated mining town or so. Remote tech workers with enough leisure time to fall deep into the rabbit hole of gaming don't quite fit that pattern.

For coders thinking they'll just build something cool?

This is your competition.

Probably, yes. I'm guilty of taking jobs like these in the past as well.